As you know, I've spent a lot of time writing about how freelancers shouldn't consider lowering their rates. After all, it would be a lose-lose scenario in the short and long run. And not just for the freelancer who lowers their rates, but for the entire freelancer market. Many of you have agreed.
However, I'm now changing my tune. Given recent developments (global and personal), I can no longer support the position of never lowering freelance rates, nor can I chastise any freelancer who works at a lower rate.
Since the beginning of last November I've worked a total of 13 days. 11 of those days I have driven 106 miles a day (just over 2 hours round trip), to work for a tiny agency doing mechanicals at a reduced "production rate". So why on earth would I agree to drive half way across the state to do limited production work at a reduced rate? Because I have no choice, that's why. It's amazing how fast your funds will evaporate after 4 and a half months with no work. Of course, our new baby has compounded the issue ten fold.
With my back against the wall I'm doing whatever it takes to keep my family fed. If that makes me a hypocrite, or means that I've ruined the market for myself and fellow freelancers than so be it. All I know is that my baby has diapers, and the mortgage company hasn't taken my house. And I know for a fact that I'm not the only freelancer in this position. I also know for a fact that quite a few freelancers are taking whatever work they can get at whatever rate they can get. Desperate times call for desperate measures, and in case anyone hasn't been paying attention, these are some desperate times.
Never mind the freelance market, you simply have never seen an economy this bad. Neither have your parents. Your grandparents might have seen worse if they lived through the market crash of 1929 and subsequent depression of the thirties. I'm hoping things don't get as bad as that, but at this rate I don't know. All I know is that some clients are conducting layoffs and forcing agencies to lower their rates. In turn, some agencies are conducting layoffs and forcing vendors to lower their rates. The automotive industry, the airlines, the housing market and everyone else are cutting their rates. Given these facts, how could we think we would be able to successfully maintain our rates?
Note that I'm not advocating that anyone voluntarily lower their rates. Obviously, it's a last resort, and I'm sure some freelancers haven't had to worry about it. Everyone needs to strike their own deal and be OK with whatever deal they make. Now, for those of us who have to accept work at a lower rate, what are some tactics we can employ to keep us from being completely taken advantage of? (cue Kathy...)
Slim and I have chatted extensively via email about this topic. Rather than ramble on and on in a response, I will be posting my own article regarding suggestions on rate negations and compromises. One such idea I read about said that if you feel you have to lower your rate to secure a gig, consider submitting your invoice with your regular rate and than subtract a "discount" at the end. This way your client sees that you're being sensitive to their budget and you can gently make them understand that this will not be a permanent change. Stay tuned for more on this topic once I organize my thoughts and feel free to chime in. We want to hear your ideas!
ReplyDeleteI understand the motivation to lower rates, but you DO realize rates WILL drop until they are simply unsustainable, right?
ReplyDeleteJoe
I understand that you are trying to look at the bigger picture here which is the smart thing to do. Obviously, we can speculate on the potential effects of freelance rate decreases all day long, and I do admit you have a completely valid point. However, this topic may be moot as I believe the biggest immediate concern we have right now is the overall effect of the economy on the entire promotion industry - not just the freelance market. I'd like to elaborate further on this in an upcoming post.
ReplyDeleteOf course, everyone needs to examine their own situations this year and make their own personal decisions. Even some people that are KEEPING their jobs are getting pay cuts this year. With that in mind, it kinda sobers up the freelance view, huh?
ReplyDeleteMy short advice is, that if you must reduce your rate, create your own self-imposed cut-off. By initial suggestion would be: anything below 20% rate cut is unacceptable.
There comes a point where, sure, they might be able to get someone else to do the work cheaper -- but at what overall cost?
I also agree with Kathy: ALWAYS mark on the invoice that a discount rate is given. AND, if you DO negociate down, be clear this is a "2009 rate" only, or somesuch, to give yourself an "out" in 2010.
The slippery slope is exactly what Jay mentioned: when all freelancers, en masse, lower their rates by $20-30/hr, those effectively become the NEW standard rates for YEARS to come.